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HMRC internal manual

Venture Capital Schemes Manual

HM Revenue & Customs
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SEIS: income tax relief: the investor: no substantial interest in the issuing company


In order to qualify for SEIS relief, an investor must not have a ‘substantial interest’ in the company at any time from incorporation of the company to the termination date (period A - VCM31140)


‘Substantial interest’ is defined as the investor directly or indirectly possessing, or having an entitlement to acquire more than a 30 percent stake in the company via

  • ordinary or issued share capital,
  • voting power,
  • rights on winding up, or
  • as having control of the company (see below).

Shareholdings of associates are taken into account in arriving at the 30 percent figure. For the meaning of ‘associate’ see VCM32020.

An individual is not regarded as having a substantial interest in a company for this purpose, if the company has issued only subscriber shares (that is, those issued as part of the procedures via which the company is registered at Companies’ House) and the company has not yet begun to carry on any trade or preparations for any trade. (ITA07/S257BF(5)).

‘Control’ for this purpose uses the definition at ITA07/S995. That is, the power of any person by means of the holding or shares or voting power, or as a result of any powers conferred by a document regulating the company or any other company, that the affairs of the company are conducted in accordance with the person’s wishes.